In a Process Costing System, the Application of Factory Overhead

question 9

Multiple Choice

In a process costing system, the application of factory overhead usually would be recorded as an increase in: (CPA adapted)

• A) Finished goods inventory control.
• B) Factory overhead control.
• C) Cost of goods sold.
• D) Work-in-process inventory control.

---

Definitions:

Constant Rate

A consistent, unchanging speed or pace at which something occurs or changes over time.

Diminishing Marginal Returns

The principle that adding an additional factor of production results in a smaller increase in output after a certain point.

Total Product

The total output or production by a firm using a given amount of inputs within a specific period.

Variable Input

A resource or factor of production whose quantity can be changed easily in the short term to adjust production levels.